As it turns out, all five members of the FCC signed off on a letter encouraging carriers to reach negotiated settlements on UNE terms and conditions. While ILECs such as Bell South, SBC and Qwest have made overtures recently to try and reach a negotiated settlement, those efforts have been given a quick brush-off by CLECs. We'll know by Tuesday's deadline how the FCC's unprecedented move will play out. But for the time being, my enthusiasm in seeing Chairman Powell reach common ground with Commisioner Martin is tempered by Commissioner Copps' response to the letter he had just signed: "[Consumers] will rightfully feel left out in the cold if these negotiations lead only to higher phone rates." Hardly a statement that will incentivize the CLECs to negotiate in good faith.

On the state side, we already know that a number of commissioners support the FCC's move. FERUP, the newly-anointed "Federation for Economically Rational Utility Policy," released a statement today applauding the Commission. Here's the link: FERUP March 31 PR.doc

The Wall Street Journal reports [subscription required] that the Republican FCC commissioners are jointly urging the warring parties in the Triennial Review to "negotiate, not litigate."

It is difficult to call any transaction occurring against the current regulatory backdrop as "market-driven." That said, the FCC urging the parties to the telecom wars to negotiate their wholesale business relationship is a positive start.

Kudos as well to the Chairman and Commissioner Martin for an apparent rapprochement. Now, they need to use their bully pulpits to get their respective cheering sections to negotiate.

According to the Wall Street Journal, VOIP upstart Vonage has sued AT&T (subscription required) over the name of its new VOIP service, CallVantage. AT&T announced its service February 21, but didn't officially offer it until yesterday. Vonage feels the name of AT&T's service is too similar to its own and will cause market place confusion and hurt the small upstart in its competition with major telecom providers.

AT&T is not the only firm making VoIP news this week. Yesterday, Level(3) Communications announced new Internet-based voice services. Interestingly, E911 services are among the services included in the new VoIP offerings.

"Phone calling over the Internet is about to go mainstream" is the WSJ's lead on its story [subscription required] about AT&T's announcement that it will begin offering Internet calling in two states.

The story notes that cable companies are moving aggressively into the Internet calling space, and it chronicles the head-start of Vonage. Then it concludes that, "the biggest potential victims of this wave of Internet calling offerings are the Bells. Goldman Sachs esitimates that Internet calling can take 7% of the residential phone lines from the Bells by the end of 2006."

It is true that the Bells are the biggest potential victims of this new technology--if the policymakers do not avail themselves of the reform imperatives presented by what I've called this blast from Shumpeter's trumpet to rationalize a regulatory regime essentially devised in a monopoly era. Probably the most fundamental issue of telecommunications policy over the next several years will be the fight over whether facilities-based service providers like the Bells and other wireline companies--and cable, wireless, and satellite operators--will be compelled to provide access to their facilities at regulated prices to companies like Vonage, AT&T, Microsoft (?), without their own networks.

In other words, the non-discrimination and unbundling requirements developed in Computer II in 1980 were perfectly appropriate in a monopoly telecom environment. And they may have been appropriate through the 80s and into the late 90s as the Computer II access requirements turned into the Computer III Open Network Architecture requirements and the early post-1996 Act UNE requirements. But all of these "compelled access" requirements--"network neutrality" is just the latest appellation, "Computer IV" would do just as well--no longer represent sound policy in an environment in which we have multiple facilities-based broadband competitors.

I think we'll see the telephone companies and the cable companies, along with others who have or aspire to have their own network facilities, joining together to try to beat back the proponents of the compelled access regimes. It's likely to be a long, tough fight for the free market forces.

"It is critical to underscore that new technologies like VoIP in no way substitute for the important, pro-competitive local phone policies established by the New Jersey Board of Public Utilities -- policies that are helping to keep phone bills down for New Jersey residents," said J. Michael Schweder, president-AT&T New Jersey and Pennsylvania.

Let's see, VoIP is not a substitute for UNE-P, so be sure to keep that, but don't regulate this new technology. Nice. I foresee a Jim Glassman article on the wonders of 'net neutrality' in the near-future.

Stuart Buck is in the hospital with a stroke. Never met him face-to-face, but has been a frequent stop of mine in the blogosphere. Nothing to say but my thoughts and prayers -- along with countless others -- are with him and his family.

A sign of things to come, vertical services that will be offered in the "CallVantage" service include:
- "Call Logs," which tracks incoming and outgoing calling with "click to dial" capability;
- "Do Not Disturb," which allows customers to receive calls only when they want, while letting emergency calls ring in;
- "Personal Conferencing," which enables users to set up a meeting with up to nine additional callers;
- "Locate Me," which enables home phones to find customers by ringing up to five phones all at once or one right after the other;
- "Voicemail with eFeatures," which allows customers to hear their messages from any phone or PC and forward the voicemail to anyone on the Web.

I get both encouraged and scared of presidential candidates mentioning broadband. If these proposals get fleshed out, let's hope that markets, not regulators or appropriators, play the central role in continuing to bring broadband to the country.